Nissan he will be the victim of cost-cutting “meat” if he joins forces with his Japanese counterparts Hondaformer Nissan CEO Carlos Ghosn told CNBC on Tuesday.
“I think, of course, Honda will be in the driver's seat, which is very sad to see after leading Nissan for 19 years (and) “Nissan to the forefront of the industry, to see that they are going to suffer meat, because there is a complete duplication between Nissan and Honda,” he told CNBC's “Squawk Box Europe.”
Ghosn, who once headed three carmakers as part of the Nissan-Renault-Mitsubishi alliance, has been living in Lebanon after being was arrested in Japan in November 2018 and escaping prosecution for financial crimes. He denies wrongdoing.
“There is almost no complementarity here, and that means, if they want to cooperate, it's going to be through cost reduction, duplication of plan, duplication of technology, and we know exactly who ' going to pay the price. will be a minor partner, and it will be Nissan,” Ghosn said.
Nissan had more in common with France RenaultGhosn meas, reference a a long-term partnership that is essentially unlimited.
Speculation about a possible Honda and Nissan merger began earlier this month, and the two companies confirmed the official start of negotiations on business integration at a press conference on Monday. Under the current proposals, a holding company would act as the parent of both companies and be listed on the Tokyo Stock Exchange, with Honda – which has a market capitalization roughly four times that of Nissan – naming its ' majority of the board members of the new entity. Nissan is a strategic partner Mitsubishi also involved in discussions about joining the group.
The $54 billion Nissan-Honda group would jump over South Korea Hyundai to become the world's third largest carmaker in terms of vehicle sales, behind Japan Toyota and Germany Volkswagen. The combined group would also represent a landmark in the consolidation of the auto industry, which has long been expected in Japan and around the world as businesses struggle with the costs of developing electric vehicles and driving technology. to behave autonomously.
Executives at both Honda and Nissan on Monday stress that a combined company would be able to share the information and resources necessary to compete in the EV transition and deliver economies of scale, increasing operating profit to 3 trillion yen ($19.1 billion) in the long run.
Nissan is embarking on the ambitious merger and at the same time doing deep work restructuring he announced in November, which will reduce global production capacity by a fifth and cut 9,000 jobs.
Honda CEO Toshihiro Mibe acknowledged on Monday that some shareholders may feel that his company would support Nissan struggling as part of the deal, but stressed that the business integration talks “will not come to fruition” unless the two makers stand alone.
Ghosn nevertheless told CNBC that the merger plan suggests “Nissan is in panic mode, looking for someone to save them from the situation, because they can't generate the solution on their own.”
He expressed “high doubt” that Nissan's turnaround would be successful, without giving details.
Kei Okamura, senior vice president and portfolio manager at Neuberger Berman, expressed the feeling that the details of the merger plan still need to be ironed out.
“If you're an investor you're going to think about the three to five earnings perspective. What was mentioned (Monday) was the short term, therefore the timeline, and the long term view. The only issue is how this unified entity is going to get there, and that's where there's a lot of uncertainty,” Okamura told CNBC's “Street signs of Asia” Tuesday.
“The post-merger integration is going to be absolutely necessary … if these companies can't fully integrate themselves in terms of the people, the assets and of course the culture, the to release those contracts, and we they have to take into account that this deal may not happen if (Nissan) doesn't go through their conversion program,” said Okamura.
Nissan declined to comment further for this story her statement out on Monday. Honda did not immediately respond to CNBC's request for comment.
